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Two titans of different eras battle over something they believe is crucial to their future.
The Paramount-Netflix fight over Warner Bros. Discovery sounds like a great Hollywood script. Instead, it's a reality, and set to reshape the entertainment industry one way or another.
There's a lot to unpack here, so let's get into it.
Wait, Paramount Skydance is trying to buy Warner Bros.? I thought Netflix was buying Warner Bros.?
You're right, and you're right. Netflix is buying Warner Bros. At least, the two sides reached an agreement on Friday for WBD's streaming and studio assets. On Monday, Paramount, which was also bidding on WBD, launched a hostile bid for it. Paramount CEO David Ellison said the deal "represents a powerful opportunity to strengthen both companies and the entertainment industry as a whole," according to a memo sent to Paramount employees first obtained by BI's James Faris.
What does that even mean? How can Paramount make a deal with a company that already turned it down? I did call it "hostile." Paramount's Ellison (more on him below) is appealing directly to WBD shareholders that his company is the better fit. Hostile bids aren't always easy, but they have been successful in the past. Here's a list of some of the biggest.
Does that mean Comcast is going to rejoin the fray too? That seems … unlikely.
How are the two bids different? I'm so glad you asked! BI's Lucia Moses has a full breakdown on how Paramount and Netflix are each pitching themselves as the better home for WBD. As for the structure of the deals: Netflix doesn't want WBD's TV networks like CNN, TNT, and TruTV. It's offering $27.75 per share. Paramount is looking to buy it all with a $30-per-share offer.
What's Netflix's pitch? It's the biggest streamer on the block. That means a massive distribution channel for WBD's well-known franchises (DC Comics, Harry Potter). It's also pitching this as a win for Hollywood and consumers. It says it'll create more jobs in the long term, and give Netflix subscribers access to content they haven't seen.
What about Paramount? An easier path to regulatory approval. Netflix's massive size has led some to question if it'll face antitrust concerns. Netflix co-CEO Ted Sarandos said he already discussed the deal with President Donald Trump ahead of time. But Ellison has his own relationship with Trump, and thinks he can get regulatory approval in as little as 12 months. On Monday, Trump said he wanted to "do what's right."
Who is this guy Ellison anyway? His dad is Larry Ellison, the billionaire cofounder of Oracle and a longtime Trump ally. The 42-year-old isn't keen to just sit on a beach and inherit his father's massive fortune, though. He's been involved in the entertainment space since founding Skydance back in 2006. This year he combined Skydance with Parmount, cut a deal with the UFC, and shook up CBS News' leadership.
Anything else worth mentioning? Saudi Arabia, Qatar, and Abu Dhabi's sovereign wealth funds are all involved in Paramount's deal. What role they'll play in the company, beyond putting up billions of dollars to help get the deal done, isn't quite clear, writes BI's Peter Kafka. And while we're talking about interesting parties on the Paramount side, Jared Kushner, Trump's son-in-law, is also part of the offer via his private-equity firm.
Read the full article here
